Strategy Analysis Assignment

You should use at least one slide for each of these questions. Put the method (and evidence)
by which you answered the question in the deck – if it’s interesting, put it explicitly in the slide, if
it’s not, put it in notes or an appendix. Since this deck and your presentation will be half your
final grade, you need to put all the content into the deck.

1)​ ​What product/product market(s) are you studying?

We are studying the Hololens (AR) and Windows 10 (VR) headsets. The Hololens is currently
available for purchase and aimed at the enterprise market. The W10 headsets will be available
to developers in March, the technology will be licensed and headsets will be built by the
following companies: Lenovo, Acer, Asus, HP, Dell and 3Glasses.

While the core product is the hardware, what Microsoft is trying to build is a platform around the
hardware, much like it did in the case of Xbox, creating a technology platform that utilizes the
Hardware is essential to the strategy, by allowing other manufacturers to build VR headsets,
what microsoft does here is similar to it's PC strategy, wherein it's primary goal was to reach as
large an audience as possible without bearing the brunt of manufacturing them. Essentially
Microsoft is using it’s Xbox strategy for the Hololens while it’s PC strategy for the VR Headsets,
but maintaining a core platform for the Software.
Windows Hololens
2)​ ​Who are the competitors?
The Competition for the Hololens category in essence Microsoft’s AR includes the following
companies:-
- Meta 2
- MagicLeap
Competition for the VR Headset arena is:
- Sony PSVR (headset)
- Google Cardboard (headset) and Daydream (headset for phones (phones must be
compatible))
- Facebook Oculus Rift (headset)
- HTC Vive (headset) runs on SteamVR

Dormant Competitor:-
- Essentially it is Apple, the rivalry has been since ages and being aware of their capability
is something that Microsoft can not ignore.
Competition​ ​AR competitor

3)​ ​What is the value proposition of the product? Estimate the customer’s willingness to
pay (relative, perhaps, to competitors).
Hololens - premium headset for enterprise (medical, architectural, design, etc) = $3000.
Hololens’ value lies with its uniqueness, for instance architectural firms can ‘walk’ a client
through their new building without ever leaving the office or breaking ground. Similarly,
surgeons in training can go through a whole operation without having to pick up a knife. These
examples show the massive potential money savings. Currently, the competitors are similar in
price and don’t have Microsoft’s support and development depth.

Windows 10 VR - budget headsets for PC apps and games = $300 to $800. If Windows and its
partners can deliver on the lower end of this pricing estimate, they will be creating a new
segment of the market. No one offers VR goggles (that are well made) at that price. For the
higher priced offerings, they’ll have to offer at least similar if not superior performance or
features.
Consumer
4)​ ​How is the product better/worse/different from competitors’ products?
Hololens:
- First to market, the product has focussed on targeting developers as their primary target.
- They have the first mover advantage and being the only AR product on the market has
allowed them to put more into research and development before pushing out a newer
version of Hololens.
- The biggest disadvantage currently is the cost of the product, which makes it difficult to
be sold on a large scale.
- However, since the focus has been on making the platform around the product, it has
enough leeway to focus on sales later. While this strategy may be risky, customer
onboarding is critical when timed rightly.
VR Headset:
- Microsoft has pushed the manufacturing of the VR headsets upon the different
manufacturers of PCs thus allowing it to not have manufacturing and distribution costs.
- The primary advantage of the product is it’s low cost and Microsoft’s claim of being able
to run on a normal pc not requiring the hidden costs of owning a VR headset.
- The lack of information about the sort of software and applications the headset would be
running on, makes it difficult to speculate.
- Established players in the industry like HTC, Oculus have an advantage through gaining
market experience.
- Being a late mover in the industry can affect Microsoft’s positioning and sales in the
market. This however can be offset by the large scale appeal of not owning a “Gaming”
system, if and only if Microsoft delivers on it’s promise.

5)​ ​What phase in its life cycle is the product currently in?
Currently, both Hololens and the VR goggles are in their introduction stages, with Hololens
starting to transition into growth. Hololens is currently for sale, but already MSFT is focusing
efforts on their next iteration while letting developers and industry create products and new uses
for the product. The VR goggles are only available to developers so they are solidly in the
introduction stage of their life cycle.
6)​ ​What has the corporation’s technology and product life cycle been to date? What is
your assessment of this strategy?
In many ways MSFT represents the old guard of the tech industry. Yet, through several
management and product changes (led by Nadella and others), they’re producing some very
innovative products and technology. Over the past few years they’ve started releasing ‘beta’ or
early stage products to developers, people of influence and even the public to assist them as
they release new products.

This is a strategy that many other tech companies use, Google especially, and with the right
guidance it works very well. Using this strategy, MSFT gets feedback in real-time from people
that are actually using the product. You can see how potential users will interact and even
‘break’ your products then redesign accordingly.

7)​ ​What are the potential future strategies? Assess each of them.
Currently, this too early to tell.

8)​ ​Is the product a platform? If yes, describe the platform and assess the platform
strategy to date and possibilities in the future. If no, could the product be used to create
a platform?
While the core product is the hardware, what Microsoft is trying to build is a platform around the
hardware, much like it did in the case of Xbox, creating a technology platform that utilizes the
Hardware is essential to the strategy, by allowing other manufacturers to build VR headsets,
what microsoft does here is similar to it's PC strategy, wherein it's primary goal was to reach as
large an audience as possible without bearing the brunt of manufacturing them. Essentially
Microsoft is using it’s Xbox strategy for the Hololens while it’s PC strategy for the VR Headsets,
but maintaining a core platform for the Software.

9)​ ​Are there any barriers to imitation or leap-frogging by competitors?

Microsoft is trying to create barriers in two main ways.
1. They’ve released a unique product in Hololens and made it available to enterprise. This
allows them to push development in a less price sensitive environment. Gaining
knowledge this way will allow them to learn quickly and apply what they’ve learned to
cheaper future products.
2. By creating the Holographic OS, MSFT is trying to make it ​the ​industry standard. This is
similar to their strategy with Windows and even the MS Office Suite, there are
competitors, but these products are still very much the standard.
Still MSFT will have to stay innovative and agile or they risk being superseded by competitors.

10)Describe the firm’s technology space, focusing, if possible, on the space that
supports the product.
Microsoft has also developed its Holographic Operating System that integrates with Windows
and will be the platform for running / developing apps. MS is trying to make Holographic the OS
of choice for all immersive VR goggles.
Holographic
11) What competitors does the firm have in technology? Are these the same competitors
in products?
Valve SteamVR is the platform/OS for headsets (HTC Vive) and Valve OpenVR is API to allow
apps to run on SteamVR.

Questions
- Can other AR developers make use of the simulator that Microsoft has developed? Or
can it be a potential barrier to entry?
- Which (AR or VR) has a greater potential for network effects?
- Should Microsoft go open source or closed?